In the face of climate change, many American business leaders recognize the importance of moving towards decarbonization. But making progress on the path to net zero remains a challenge for many. This will require coordination, collaboration and initial financial investment to rapidly transform industries into a series of complex, interconnected and emission-free systems. Without this commitment, the effects of global warming are expected to disrupt our growth and could financially harm all industries and regions of the country.
If left unchecked, the economic cost of climate change in the United States alone could reach $14.5 trillion by 2070. However, taking swift action to transition to a prosperous, low-carbon economy could usher in a new industrial revolution in energy, mobility, manufacturing and production. food and land use. It could also add up to $3 trillion to the US economy over the next 50 years. Achieving net zero emissions by 2050 is not just an ambitious goal, it is an economic growth imperative. If companies aren’t a credible part of the solution, evidence suggests the planet – and their bottom line – will likely suffer. Among the steps to consider:
- Transform your workforce Embrace sustainability and climate initiatives, such as incorporating environmental, social and governance (ESG) metrics or objectives into company incentive plans. Consider aligning compensation policies and incentives and benefits with sustainability and climate priorities. Encourage travel policies that reduce your organization’s climate footprint. These represent a double benefit, with companies increasing workforce engagement while advancing their sustainability journey.
- Integrating sustainability into production Examine your products and systems to find ways to generate carbon offsets and reduce carbon emissions. This could include the development of low-carbon products through the implementation of new practices and advanced technologies. Explore the shift to fully renewable electricity and other clean energy sources, enabling broader decarbonization.
- Refine internal controls Review tax and customs considerations related to your ESG activities. Companies with global geographic exposure can put processes in place to assess risks in their supply chains.
- Investing in decarbonization On the path to decarbonization, companies could trigger the creation of new industries and transform existing industries into sophisticated, interconnected parts of a global low-emissions economy.
Dan Berner is a managing partner at Deloitte in Dallas.